A legal representative excluded from arbitration may challenge the eventual award under Section 34.

Late Sultan Ahmed had entered into agreements with Asian Hotels (North) Ltd. (“AHNL”) concerning Shop No. U-72 at Hyatt Regency Shopping Arcade, New Delhi.

Following AHNL’s termination letter dated 29 May 2020, legal proceedings were initiated concerning the shop and were subsequently referred to arbitration.

Sultan Ahmed died on 9 September 2023, leaving nine legal heirs, including the petitioner, Faisal Ahmed, and respondent no. 2, Mujeeb Ahmed.

Respondent no. 2 pursued the arbitration as a legal heir of Sultan Ahmed, while the petitioner alleged that he and the other legal heirs were neither informed nor impleaded.

The arbitration had reached the stage of final arguments when the petitioner became aware of it and sought intervention, audience, and permission to produce documents.

The Sole Arbitrator rejected the intervention application, holding that Mujeeb Ahmed represented the estate and that the inter se rights of the legal heirs could not be adjudicated in the arbitration.

The petitioner challenged that order under Articles 226 and 227 of the Constitution, seeking stay or reopening of the arbitral proceedings and participation therein.

Section 5 of the Arbitration and Conciliation Act, 1996 (“A&C Act”) embodies the principle of minimal judicial intervention in arbitral proceedings.

Although Articles 226 and 227 confer constitutional jurisdiction over arbitral tribunals, such jurisdiction is to be exercised only in exceptional cases, particularly where the party is genuinely remediless or there is clear bad faith, as recognised in SBP & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618, Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd., (2020) 15 SCC 706, and Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd., (2022) 1 SCC 75.

Under Section 2(1)(g), a legal representative includes a person who in law represents the estate of a deceased person, including a person who intermeddles with the estate; Section 40 provides that an arbitration agreement survives the death of a party and is enforceable by or against the legal representative; and Section 35 makes the award binding on the parties and persons claiming under them.

The Court relied on V.K. John v. S. Mukanchand Bothra and HUF (Died) represented by LRs., 2026 INSC 393, and Ravi Prakash Goel v. Chandra Prakash Goel, (2008) 13 SCC 667, for the rule that legal representatives step into the shoes of the deceased and may challenge an award under Section 34 even if they did not participate in the arbitration.

Section 34(2)(a)(iii) permits challenge to an award where proper notice was not given or the party was otherwise unable to present its case.

The Court also applied the principle in Daya Ram v. Shyam Sundari, 1964 SCC OnLine SC 153, followed in N.K. Mohd. Sulaiman Sahib v. Mohd. Ismail Saheb, 1965 SCC OnLine SC 103 and Harihar Prasad Singh v. Balmiki Prasad Singh, (1975) 1 SCC 212, that one legal representative may, in appropriate circumstances, sufficiently represent the estate even when all legal representatives are not before the adjudicating forum.

The Court held that the petitioner’s grievance concerning non-participation and lack of notice did not, by itself, justify constitutional intervention at an advanced stage of arbitration.

Respondent no. 2 was admittedly a legal heir and had pursued claims arising from agreements entered into by the deceased; the Arbitrator had expressly clarified that he represented the estate and that any relief obtained would be held in that representative capacity, rather than as respondent no. 2’s exclusive personal entitlement.

Accordingly, the absence of the petitioner and the other heirs did not automatically invalidate the proceedings.

Further, the statutory scheme under Sections 2(1)(g), 35 and 40 treated the legal representatives as persons claiming under the deceased, while Section 34(2)(a)(iii) provided an avenue to challenge any eventual award for want of notice or inability to present the case.

Since the arbitration had been pending for over two years and had reached final arguments, and since the petitioner was not remediless, the case did not meet the narrow threshold for interference under Articles 226 and 227.

It clarified that any award in favour of respondent no. 2 would relate to and benefit the estate of late Sultan Ahmed and would not confer an exclusive personal right upon him; conversely, an adverse award would operate against the estate as represented in the arbitration.

The petitioner and the other legal heirs were held entitled to challenge the eventual award under Section 34 of the A&C Act, including on grounds of want of notice or denial of an opportunity to present their case.

The Court expressly left open the inter se rights of the legal heirs and all other substantive remedies available before a competent forum.